and broadcasting live direct from the heart of moscow this is our team on john thomas closer take a look at the top headlines khadafi a loyalists continue to put up a strong resistance and claim nato has killed hundreds of civilians in recent bombing raids this comes as the libya's former rebels are granted a seat at the u.n. where talks move to post-war reconstruction. meanwhile there's another bid for recognition with palestine president waiting for a u.n. vote on statehood despite a u.s. promise to veto it that says some israeli west bank settlers say they're ready to

leave the area but if their government won't like them. and in kosovo a standoff continues between police and ethnic serbs angry at pristina have taken control of two border posts blocking serbian airports mostly serb but northern north of the republic claim their rights are being the violated by kosovo albanians . up next our special report on the reasons behind the economic crisis that has affected us all but so few understand. i. believe that i will go to the picket line around his house. so we're going to let it go in the. areas that are ready. to run. like.

the few smart. grid.

we say we live in the camp the listbox the scientists put the bad mood. capitalism is our way of life the market system its highest expression our media hypes it in quasi religious terms even if its impact is sometimes quite negative and even debated in classrooms that we agree of capitalism is an economic system a system for the production and distribution of things we need one i want to agree that not what you have been about to. their hope to be of michael thanks for coming in to operate. most of us recognize we live in an inherently volatile system problem free but some of the conventional wisdom goes better than any alternative when you still believe the free market is our salvation even as our economy has crashed brought down to not

just by greed but calculated scams and schemes that's not of the intent of our laws enraged a few and devastated the economy leading to a massive loss of jobs homes and personal wealth. return. in two thousand and six my film in debt we trust warned of a coming economic collapse. the stock that the next great economic crisis especially brought about by the depth of which it will create an economic crisis so deep that of threats as i was called a dinner in vain and a long list elevation. in the sixty's just really. i thought up with a book that came out before lehman brothers went bankrupt speaking on wall street i called for a jail out not bailed out i used to think of wall street as

a financial center i now think of it as a crime scene. nomi prins was a managing paul. bear stearns and goldman sachs this is the most expensive take out the biggest crime. in world history we're talking about a crime we can't even quantify we're talking top of it's a trillions of dollars and a lot of this film will explore the scale of money's missing written off lost ripped off and these various scams and in the case of the bailout funds unaccounted for. graydon carter editor of vanity fair we have some good of best when he wrote it can fairly be said that the chain of catastrophic bets made over the past decade by a few hundred bankers they will turn out to be the greatest nonviolent crime against humanity in history they brought the world's economy to its knees last tens of

millions of people their jobs and owning entrenched the retirement plans of a generation and they could drive an estimated two hundred million people worldwide into dire poverty in other words and never before have so few done so much to so many and when experts estimate the total money last may reach a hundred ninety six point seven trillion dollars and that could be lower like millions of americans i've lost thousands of dollars in retirement funds and i haven't had as bad as many it's not just about them it's about me too i have a stake in it and like millions of angry about the way our economy was a direct. to help with our investigation we spoke with convicted white collar criminal san anton the right color criminal hostile to the case for you

subpoenaed documents we destroyed documents you subpoena witnesses we walk so if you are at a disadvantage because the right color are in effect we are economic credits. toona investigative reporter on the business speak wall street steals far more than the mafia says gary weiss on wall street. takes laws for much larger something money going broke the mafia scales the regulatory system is such that they can get away with it the lack of media scrutiny the absence of regulation the widespread illusion that markets and real estate could only go up created a casino mentality and environment for successful fraudsters and white collar criminals in your honor for many years until my arrest on december eleven two thousand and eight i upgraded a ponzi scheme i knew what i was doing was wrong and the criminal.

white collar crime on wall street has been under reported except for a very few high profile cases as one of hundreds of reporters staked out a new york courthouse to report bernie made all submission of guilt in his ponzi scheme and their millions and millions of dollars they go to the sources of data many of them right oblique angry at an ira worth one point three million of the money that was about one point eight million because it's gone on that how do you think he got away with this for so long how a person can run a stand for so many years without that effect that was one of the things i thought of hippies they could successfully run a scam for that long made off was not alone the regulators are now investigating scores of similar crimes they say there is a ponzi money i'm underway this four levels and every white collar crime is they got a good thing what is the people at the what is the people that knew what was going

on but didn't participate and people that should have known what was going on like boards of directors or it is but that participate so what they try to do is they try to. get to the culpability of the guy at the top by working from the bottom the problem that you have in the body weight of cases they've got the guy at the top first and he's protecting the other three layers underneath that wall street alliance action turns to be very borderline illegal because the people extracting sense of either one is setting up the legal framework route economics is what we're really not only calls it in our new book but the reason why the line between what is clear and what is no disappear is because of the. but when you remove all that is fiction when you remove all the controls then of course what is legal and wants is illegal so here you're creating a crime scene and you're creating a crime. and you are. affectively by the

police officers all at the same time only in the form of a regulatory body or a system for the laws that work for law street in june two thousand and nine the f.b.i. said it was investigating thirteen hundred securities fraud cases including many ponzi schemes as well as more than five hundred eighty corporate fraud cases and most of these cases got little attention but the media loves arch criminals like financier bernard madoff is a complicated right collar crimes of which the government does not have the resources to thoroughly prosecute and the white collar criminals know it so they set it up not as a single transaction that's a crime but a series of transaction that wants to put together makes it a crime but that you have to go beyond the prosecution of one wrongdoer and look at it we want street itself became a ponzi scheme you have to examine a pattern

a system of criminality which brought the investment and real estate worlds together in a movie trillion dollars. scam. to simplify there were three interconnected rings in this circus involving the biggest firms in the industry it started in the real estate business where our desire for homes the in her again dream was turned into a scheme first predatory subprime lending over the years got people into mortgages they couldn't afford and that the lenders knew they couldn't sustain it was enabled by artificially low interest rates with financing provided by twenty five of the top banks in the country the second component of the crime involved what happened next when the biggest banks and investment houses on wall street bought and then securitized loans as structured financial products these mortgage bundles will be

sold worldwide without full disclosure of their lack of underlying assets or the risks the banks that bought these derivative products failed to do due diligence relying on rating agencies that overvalued their worth and accounting firms that did not do their job the whole process was corrupt to the core. finally the third level of this interconnected but they centralize criminal enterprise involved ensuring these often throttling practices in some cases betting against them by the very people who sold them to guarantee that they would be protected when borrowers who couldn't afford loans to faulted they used insurance companies like ai g. . put these three criminal components together and a pattern emerges a pattern of financial crime.

the financial crisis started because people could no longer afford to make payments on their sub prime mortgage loan this is a good education a good start of this front but is out in full close to all of that you just said it was under strict nobody moves it nobody wants to run see it the housing crisis hit america like a tsunami destroying neighborhoods and costing millions of families their homes just. to suck up those good clothes desperate for us. how did it happen why did so many top banks lend to some of the poorest members of society in a practice known as sub prime lending featuring loans like the one called a ninja no income no jobs no assets apparently no problem the reason higher

fees up front and billions more when mortgages were turned into securities and resold eye wall street. sixty percent of the subprime borrowers could have qualified for less costly prime rates but most were told their homes would go up in value really except in onerous terms to give their families a piece of the american dream. and many old into believing they could afford houses with no money down and loaded for the create interest rates watch the cost of adjustable rate mortgages or arms shingo up when i first got it i got a one percent introduction loan and my mortgage came down to second month and went up to seven point nine zero and now it's up to nine point nine and it just keeps on going up if i'm paid twenty eight hundred dollars a month for my home and one in there. let's to jail and market it. now

where i. was in and have to leave our homes our dream and even our shelters because you know the rates are going up so high and we don't even understand why it's going to it's going in somebody's pocket but not out of it should have been no surprise to anyone fraudulent lending practices resulted in a steep rise in foreclosures and getting in late two thousand and six some of the biggest subprime lenders themselves later declared bankruptcy in the news media homeowners took most of the blame it was said they had exercised a failure of personal responsibility the responsible borrowing was stigmatised irresponsible lending was not. into the for. the gays should be i described its responsibility for investigating financial fraud on its website it is called mortgage fraud and epidemic they're

calling it operation malicious mortgage the f.b.i. failed the result of a three and a half month probe it's in mortgage related fraud f.b.i. director robert muller for this operation more than four hundred defendants have been charged and we have paid one hundred seventy three convictions in crimes that accounted for more than one billion dollars in estimated losses the f.b.i. first warned of this fraud epidemic and thousand and four reporting also though that their corporate crime units had been downsized to join the fight against terrorism some criminal cases are reported in the press but not all are prosecuted with companies often pain finds rather than facing a judge or a jury goldman sachs paid sixteen million dollars to settle a so brian complain the massachusetts authorities said they had designed mortgages

to fail and they paid sixty million dollars but they did not made any deal that standard standard when wall street firms. what are in effect plea bargains with regulators for them not. according to an investigation by the center for public integrity twenty five of the sleaziest subprime lenders were backed by the biggest banks in the united states citi group wells fargo j.p. morgan chase and bank of america together the financial times reported they originated one hundred billion dollars in sub prime mortgages but two thousand and five and two thousand and seven almost three quarters of the total. were aided in the mortgage industry i first got involved it got legs i was a loner rejuvenator. and during that time what i had seen was nothing short of

amazing in terms it was very predatory the techniques that were being used the this salesmanship that was being used the gimmicks of the loans and how it was structured it really disturbed me catchall to this and how they can get away with that is people here full disclosure depending on the lending institution you went to you know the words of bank of broker or lending institution or three different all three have different sets of regulations that govern them and so full disclosure was it necessarily important to the loan itself just get them to sign on the dotted line if they were happy with the numbers you have a little. my name is mole but our number one say basically what we do is in someone's house organizations and several other issues but what i want to do is show the signature of. what we're finding out is eighty percent of the people don't even know they have by lesions on. this is the signature on her.

basically which is right here. and then have this signature here which is her actual signature which shows a completely different signature it doesn't take to me an expert to figure out that there's something terribly wrong here someone has to set aside a loan docs and they're usually probably two to three inches thick and there might be fifteen or twenty really pertinent disclosures that she to worry about ok and they're very good there i don't know what they're signing usually they'll send out a notary to sign the loan with them and one sign and a notary usually has no clue of what is in that loan and it's all part of the scheme you like to call it and then we go here we start looking at wideout and then we have a consultant. we see a consultant fee on a mortgage that should set off red flags that there's not really any consultants are on a mortgage or sale that should have been one fee to rise mortgage this mark murphy is apparently someone we need to investigate and find out exactly who he is going

he got seventy eight hundred dollars a month these people basically project we took this woman's home that she's been living in for over fifteen years and they think that it's hers where it was actually never it was her since ninety nine really the fraud and deception that was built into these transactions was a necessary part of the transaction in order to generate the profits. wall street doesn't do mortgage lending what wall street did was package sell repackage and resell mortgages making what was a small housing bubble a gigantic housing bubble and making what became an american financial problem very much a global financial problem who came to wall street today how common this next wolf who works in the financial industry is our tour guide we're looking at people who've gone through ten unthinkable low probability events in a four month period when every time you think you can catch

a breeder there's another leg down atmospheres on trading floors and in a lot of these firms are few marial friends are gone bonuses are gone futures are on shore. it's been very difficult. people want to get into a conversation i mean the regular comes out of the bank examiner to hear ok and i wonder what the regulators are to the city of i know they've got offices it was going to be around you know there was yes you see where all the guys are supposed to be watching you know what's going on and i mean when i was about his number twenty years ago you know we have surprises in right through that is you know but we got to wondering nobody got their hands around this i just wonder if you think the average person in america really grasped that to the press that really i hope they do and i think it's an excellent busted my personal guess is no my personal guess is they'd be much more angry and much more interested if they understand how much is on at play here. and the destruction here is

a relic like a strip a version is trade deals all the money has been made at this point all the take out happened a couple years ago now you just sort of looking at the remains of a very profitable time which will be followed by another very profitable time because the same people will still be involved and suffering the same types of things his biggest crime in all of this is the thing that's the least able to be understood and examined by the f.b.i. by the department just by anyone in washington the pretty tiny lowest layer of the crisis that started with subprime defaulting. at the homeowner borrower love all that money wasn't made there the money was made because several layers of the pyramid wall street investment firms and commercial banks investment groups decided to repackage those mortgages create layers of them and they then the resulting

investors here's what happens there are three defaults on mortgages. the bank holds. sells those at ten cents on the dollar to a second bag that bank puts together with three other defaults and three other defaults makes a second package and sells it to a third bag the third bag sells six of these things for ages and bungles them and sells them to some investor no idea what he has. they borrowed against those layers which is the real crime they would take a little piece of a layer of a security i don't need which somewhere there was a bunch of home buyers and they would take it and they would borrow thirty times the amount of money that it represented five big investment banks dominated wall street it was really took the subprime loans purchased from banks packaged them as bundled investments to be sold worldwide there were reports that there was what was

called sanction from wall street and other words wall street investment houses as they began to make billions on these securitized loans and see deo's and the rivet is pressuring the mortgage people at the local level kid must more give us more give us well the reason why wall street was putting the pressure of the sucking sound that you referred to earlier on the originators is because the profits that they were generated with this whole concept first opened up and people realize the money that was to be paid on the back and treating the paper they were essentially creating liquid cash from nothing but talking to myself just fourteen trillion dollars worth of assets back with subprime and other types of mortgages and c.e.o.'s created between two thousand and three and two thousand and seven fourteen trillion were created on that. investment houses had funds and private equity funds could leverage thirty forty times banks could leverage fifteen to

twenty times on average they could only leverage thirteen times on certain security more than the value of the whole country the whole gross domestic product if you want our kids and this. very conservative estimate assume that the average for the fourteen trillion dollars worth of studios was ten times which to me is a conservative estimate that's one hundred forty trillion dollars worth nothing. if you lose the fourteen trillion the other hundred forty minus the fourteen trillion doesn't exist you have nothing you have no collateral left to pay to the people that you borrow money from it off the practice of. mortgages so. clearly can't afford to target people in order to give them mortgages and then to take these mortgages to sell it back to the set in order to create mortgage backed security is a criminal act for sure and i think the bank. does. some

cases criminal but build your rises when they sell their portfolio to investors who believe. mortgages and there were very injured victims that changed the distribution chain because i can direct school boards around the country that have lost almost there and funds and lost their pension funds. in the past. now i have. to. take. my guess. and i would even say that this is racketeering because it took place between. real estate

agencies and banks to get a lot of people a lot of money when these. record numbers. the whole system became infected. wealthy british style. markets finance scandal find out what's really happening to the global economy for a no holds barred look at the global financial headlines to name two kinds of reports on our chief. world. renewed the latest in science and technology from around russia. we dump the future

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